To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 1

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 2 People with similar needs wants Marketing Mixes (4P’s) are developed for specific target markets

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 3 Don’t just focus in the product - some people define the market in terms of products they sell, instead of in terms of the satisfaction they bring

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 4 Two Basic Types of markets Generic Market broadly similar needs sellers offer competitively different ways of satisfying the needs Product- Market very similar needs sellers offer close substitute ways - not much difference between the product Page 227

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 5 Market Segmentation Two Step Process 1. Naming broad product-markets 2. Segmenting these to select target markets PAGE 231

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 6 Clustering Marketing-Oriented managers know that segmenting involves clustering people with similar needs into a market

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 7 Market Segmentation Four Criteria for determining if the segment you have is useful 1. Homogenous 2. Heterogenous 3. Substantial 4. Operational Page 233

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 8 Market Segmentation Four Criteria 1. Homogenous - the people within the segment are all similar 2. Heterogenous - the people between segments should be very different 3. Substantial - the segment should have enough people to make to worthwhile 4. Operational - the dimensions should be useful Page 233

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 9 Segmenting TR - the text talks about “dimension” such as geographic, demographic and benefits offered The proper terminology to plainly discuss the 4 ways of segmenting is Demographic Geographic Psychographic Benefit the following diagram comes from another text and may help you understand this more clearly

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 10 Figure 3.1 Bases for Market Segmentation From the Beckman, Kurtz, Boone text Market Segmentation 4 main Categories

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 11 Criteria for Segmenting Single Target Market approach Multiple Target Market approach Combined Target Market approach Page 235

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 12 Criteria for Segmenting Combined Target Market approach Eg. A company that makes garlic flavoured cream cheese competition is companies that use single market approach and make roasted garlic and garlic and herb cream cheese “… too much combining is risky …” Page 236

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 13 Segmenting “...Should you Segment, or Combine …” the text says it is better to segment - also, depends on which gives you the best profit TR - it also depends on what competition does ! Page 238

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 14 Profit is the Balancing Point In trying to determine whether you should divide the market up into many segments, and sell variations of the product to different segments, or sell the same product to everybody, the deciding factor is based on which option will give you the most profit

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 15 Market Segmentation “… cost considerations encourage more aggregating to obtain economies of scale … demand considerations suggest less aggregating to satisfy needs more exactly…” …” what does this mean ?

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 16 Market Segmentation “… Segmenting is an aggregating process …” what does this mean ?

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 17 Market Segmentation Aggregate - 1. collected; collective, total 2. Sum total 3. Unite - Oxford Pocket Dictionary TR. - all the stuff together Aggregating - putting things together which are similar

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 18 Market Segmentation Aggregating “… how far should the aggregating go …”? - sometimes not everybody will fit, you can leave them out, or just call it “other” “… these people are simply too few … may have to be ignored unless they are willing to pay a high price for special treatment…”

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 19 Int’l Mktg Requires MORE segmentation The additional differences of other cultures and languages can make segmentation more complicated That is to say, your decision to divide up the market may be based on things which are not the same as in North America Information, on which to base your segmentation, is harder to obtain Page 243

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 20 More Sophisticated Techniques VALS - Values, Attitudes and Lifestyles (page 244) VALS and Goldfarb approach are based on a segmentation approach known as psychographics, or lifestyle analysis

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 21 Psychographic Segmentation Page 49~51 in Beckman, Boone Goldfarb Segments 1. Day2day watchers 2. Old fashioned Puritans 3. Responsible survivors 4. Joiner-Activists 5. Aggressive Achievers 6. Disinterested Self-Indulgents More traditional Less traditional Page 105 in 8th edition Page 222, 9th edition Page 245, 10 th edition

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 22 Clustering Techniques “… trying to find similar patterns with sets of data …” often done with computers that have access to quite a bit of information on each target the computer runs a program designed to find common information and helps the analyst determine what the specifics of a new segment might be Page 247

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 23 Trade - off Analysis “… another computer based approach…” companies do this to figure out what things a customer is willing to pay more for, and which things are not so important so you can stop doing it ex. In the text is Marriott hotels

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 24 Simply - how customers view the firm and its product Mercedes, position is luxury Walmart, position is lowest price, quality not so bad Landrover, position is very very reliable Harvey’s - have it your way Page 248

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 25 Burger King - your way Home Depot - customer service - older advisors Zellers law toy land SONY - maintain high price position Volvo - accident safety HMV - no risk refund BKG - customized shoes

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 26 Browns shoe stores high price, funky shoes Costco Shoppers - Health Watch System Saturn - above average customer service Winners - brand names at generic name prices Honest Eds - lowest no matter what

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 27 Changing your position, to get better reaction, might mean 1. Changing the Product (one of the 4 P’s) 2. Changing the Price 3. Adding a new product line 4. Change the advertising (Promotion) eg. Women in truck commercials eg. 7UP - the Un-cola

To accompany Basic Marketing, Shapiro, 10th Cdn Ed. ppt slides created and Copyright by Tim Richardson Chapter 8 Marketing 106 Slide 28 Percentage Distribution of the Population of Canada by Province Slide 3-8 Page 38 +, Ontario contains 52% of foreign born people in Canada Geographic Segmentation